“Come to India if you want
wealth and wellness. Come to India if you want health and wholeness. Come to
India if you want prosperity with peace…You will always be welcome,” Prime
Minister Modi spread a lot of hope and sunshine in snow-blanketed Davos while
addressing the World Economic Forum Annual Summit last month. Being the first
Indian PM going to Davos in 20 years, Mr. Modi was determined to make a strong
impact by hard-selling the “New India”. In his stirring speech, interspersed
with shlokas and quotes by Mahatma Gandhi and Rabindranath Tagore; PM Modi made
a convincing case for investors to touch base with India. Citing recent data
and surveys, he explained that India was open for business, emphasising that
his government had streamlined the way with revamped policies and fast-tracked
clearances and “Red tape is out, red carpet is in.” He rightly asserted that
“New India” will be a $5 trillion economy by 2025, where Indian innovators will
become ‘job givers’ and just not remain ‘job seekers’.
The PM also pitched hard
against protectionism that has become increasingly visible in recent years. He
slammed this trend saying, “Countries are becoming inward focused,
globalisation is shrinking…this is no less a risk than terrorism and climate
change”. He even chided the international community for only talking about
lower carbon emissions, but not providing any resources or technology to deal
with the challenge. Similarly, he also vented his disappointment with countries
who are openly supporting terrorists…and splitting hair by talking of good and
bad terrorism. PM Modi has delivered – both in India and now in Davos, now only
time will tell if it’s working.
The Annual Economic Survey
presented by the finance ministry’s economists, projects that the Indian
economy will expand between 7% to 7.5% in 2018-19, a number not very different
from that estimated by the World Bank and the IMF. History will likely
recognise the implementation of the GST and the introduction of a Bankruptcy
Code as fundamental structural reforms, and the survey acknowledges both. Apart
from this the effort to recapitalise banks, addresses what is popularly called
the ‘twin balance sheet’ problem (bad loans on the books of banks, and debt on
the books of borrowers). The survey also points out that there is an increase
in the number of enterprises that pay indirect taxes. The big picture presented
by the survey is of an economy that is becoming increasingly tax compliant, and
is poised for growth, although, as the document admits, there are still
challenges when it comes to both consumption-driven growth and increasing
private investment.
The
major issues faced by the Modi Government are employment and the ongoing crisis
in agriculture. The survey picks both as issues that need to be addressed
immediately. Worryingly, it points out that “climate change might reduce farm
incomes by 20-25% in medium term”. The solution will involve more science, but
it should also involve more markets. For employment, the survey is right in
listing “private investment and exports” as the only two “truly sustainable
engines”. India would do well to focus its efforts on creating an environment
conducive to private investment and on increasing its export competitiveness.
That might well hold the key to creating jobs, although doing so against the
countervailing forces of increasing automation and rapid strides in all will be
difficult to achieve.
The World Economic Outlook
Update from the IMF estimates that the Indian economy would perform well and
will be the fastest growing economy in 2018 and 2019. China on the other hand
notched 6.8% last year but is expected to decelerate to 6.6% in 2018 and slip
further to 6.4% in 2019. Adding to the good news is the PwC Global CEOs survey
which has seen India rising one place to become the fifth best investment
destination in the world, overtaking Japan. This has been the result of
concerted and committed implementation of structural reforms. The government
has demonstrated strong dedication for upgrading infrastructure and upskilling
the people, in addition to opening up several key sectors.
There’s a lot looking good
for India but there are also some issues that need to be tackled on a war
footing for India to truly be an outstanding and model country. One of them is
the horrific fact from an Oxfam survey which declares that 1% of India has 73%
of its wealth. This inequitable distribution of wealth could pave the way for
many problems in the near future. The government is already looking at an ‘Ease
of Living’ index and should actively explore some initiative to make India’s
prosperity more inclusive.
It was something of a coup
to get all the ten heads of state and government of the Association of South
East Asian Nations (ASEAN) to congregate in Delhi. They were all invited as
Chief Guests of the Republic Day parade and to attend the Indo-ASEAN
Commemorative Summit that marks 25 years of their dialogue partnership. With
America looking inward and withdrawing from the world, China has been flexing
its economic and military might. Currently most of the ASEAN countries are
heavily dependent on China to keep their economies going. But they are alarmed
with the high-handed attitude of China in handling territorial disputes.
The ASEAN countries are now
eagerly looking at India in being the counterweight in the region. Many of the
countries are keen on boosting investments and economic ties with India. This
is significant as India and the ASEAN countries have a combined population of
1.8 billion which is a quarter of the world population. The combined GDP is
around $4.5 trillion and Indo-ASEAN trade has climbed to over $58 billion in
2016. There is much scope for developing tourism cooperation and more
importantly maritime security among the member countries. With a lot in common
like young populations, growing internet user bases and surging middle-class
households there are tremendous opportunities for all countries. In fact, the next big idea could even be about Indian membership in ASEAN!
Students’ activities are
core to BCAS and the Society takes several initiatives to promote them. The
results of Final CA and IPCC examinations held in November 2017 were announced
recently. On behalf of the Society, I take this opportunity to congratulate the
new entrants to the profession and to those taking first steps in their quest
to become CAs.
In order to encourage the
young students passing CA to become members of BCAS, even this year the Society
will be felicitating them with various benefits which has already been
announced. If your articled clerk has secured a rank or you know about a rank
holder in CA Finals, BCAS offers one-year membership free. Till date, I am
happy that 22 rank holders have already become members of BCAS. I request all
the members to encourage their students who have successfully qualified to
become members of the BCAS and those serving articleship to become student
members of BCAS.
At the Society, the
flagship program – the 51st RRC at Mahabaleshwar held in January 2018 was a
grand success. As a boost to the “Yuva Shakti”, 3 paper writers at the RRC were
youth members and the participants applauded their presentations. The other
highlight was the 3 hours Panel Discussion where the 4 panellists drawn from
diverse backgrounds expressed their thoughts on variety of subjects on the
profession. The participants immensely benefitted from the panel discussion.
The Society has lined up a number of programs in the months of February and
March. I request members to take benefit of the same.
Wishing you a Happy Budget,
Happy Maha Shivaratri & a Colourful Holi ahead!
Feel free to write to me on
president@bcasonline.org
With kind regards
CA. Narayan Pasari
President
